On the Web, not the road Computers: A growing number of car shoppers are avoiding the showrooms and the haggling by clicking onto Web services that match buyers with dealers selling at a fair price.

March 09, 1997|By Ted Shelsby | Ted Shelsby,SUN STAFF

Richard Zane wanted a new car, but he wasn't interested in cruising from one dealer to another. So he did his cruising on the Internet.

Zane, a 30-year-old doctor of emergency medicine with Johns Hopkins Hospital, is part of a small but rapidly growing number of motorists who are avoiding showroom haggling by clicking onto a Web service that matches car buyers with dealers selling at a fair price.

"It was the greatest thing ever," Zane said of his computer shopping, which ended with him leasing a Volvo 850 GTL sedan from Mike Martino's Village Volvo in Bel Air.

"There was no haggling over price and no salesman to deal with. I got the exact car I wanted and I got it for $2,000 less than offered by another dealer," he said.

It was pretty much the same for Craig Cornell of Alexandria, Va., who recently bought a Yukon from Penn Pontiac GMC in East Baltimore.

When Cornell started thinking about a new sport utility vehicle last summer, he turned to his computer.

With a few clicks of the mouse, the screen displayed a wealth of helpful information, including the dealer's cost of the GMC Yukon that had captured his fancy.

Cornell said the screen didn't just provide him the dealer's invoice price. "It gave the real price," he said, including the 3 percent hold back that the manufacturer pays the dealer after the sale.

"The salesman didn't have to sell me. I told them exactly what I wanted and the options I wanted," he said.

Working with the dealership's manager, Cornell used the computer to place an order for a Yukon "built to my specs. I have precisely the vehicle I wanted. I only paid for the options and style I wanted. It's the only way to buy a vehicle."

Both Cornell and Zane used Auto-By-Tel, which links consumers with 1,600 auto dealerships throughout the United States and Canada.

It is just one, however, of several that have sprung up to assist car buyers. Others include: DealerNet, with ties to 700 dealers; AutoWeb Interactive, 500 dealers; and AutoTown, which serves about 200.

Auto-By-Tel users fill out a form on the computer screen that identifies the specific model, color, type of engine and transmission and any options the buyer wants.

The form is sent by computer or fax to the nearest dealer that is a member of the Auto-By-Tel organization and sells the vehicle the customer is seeking.

The customer receives confirmation that the purchase request has been forwarded, then he is given the name of the dealer. The dealer is obligated to contact the customer within 48 hours -- either by telephone, fax or e-mail.

The customer has the option of negotiating with that dealer or shopping at other dealerships.

There is no charge to the car buyer.

Auto-By-Tel charges auto dealerships a monthly fee for its referrals. Territories are divided up according to ZIP codes, and a dealer's fee is determined by the number of ZIP codes it controls.

Monitoring dealers

The company says it monitors the dealers to make certain that customers are not taken advantage of.

"We don't want any surprises for the customers when they eventually go into the dealership," said Cassandra Cavanah, a spokeswoman for Irvine, Calif.-based Auto-By-Tel. "We don't want a dealer quoting one price and then raising it when the customer comes in."

She said that the service regularly surveys its customers to determine if they were treated well by the dealers.

If there are problems, she said, the dealer's contract can be terminated.

Shopping via the computer "is still in its infancy, but it's growing fast," said Jacob J. Cohen, a partner and head of the automotive division at Walpert, Smullian & Blumenthal, a Towson accounting and management consulting company that counts more than 100 of the state's 350 auto dealers among its clients.

"It is really going to be the wave of the future from a consumer's point of view," he added. "I have a feeling that five years from now, probably 40 percent of all car buyers will be going through the Internet."

Sales figures

According to J. D. Power and Associates, an international automotive marketing information company, 2.2 million of the 15.1 million light vehicles sold last year were sold by computer.

Mark Hyman, the general sales manager at Village Volvo, said computer shopping already accounts for about 30 percent of the dealer's sales.

Customers have come from throughout the state, including the Eastern Shore, and as far away as North Carolina and New York, said Benny C. Walker, general manager at Village Volvo.

When Hyman gets to work, one of the first things he does is turn on the computer and click into Auto-By-Tel.

Last Monday he was greeted with a flashing message: "New Purchase Request."

There were actually 20 consumer inquiries.

Usually, 40 to 50 percent of the inquiries result in sales.

"People don't have the time to drive from dealer to dealer looking for the best deal, and most of them don't look upon the negotiating process as sport," Hyman said.

The average time spent on buying a car the conventional way is two to three weeks, according to Cohen of Walpert, Smullian & Blumenthal, compared with three to four days by computer.

Saving time, money

Internet shopping saves more than time. It can save the consumers money.

Stanley Penn, president of the dealership carrying his name, said buying by computer will reduce "home runs" for dealers, referring to the industry's term for big profit sales.

He said consumers have far more information today to determine what is a fair price. "There are going to be more singles."

Zane was so pleased with his experience that he when he arrived home with his Volvo, he went back to the computer to negotiate a car for his father who lives in New York.

"It was fun and I saved him some money," Zane said.

Pub Date: 3/09/97

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